The trouble with trouble

[Bill Bonner’s Diary]( The Trouble With Trouble By Bill Bonner Monday, July 12, 2021 [Bill Bonner] YOUGHAL, IRELAND – America desperately needs leadership; it gets jesters, jokers, and jackasses instead. How come? To make a long story short, the elites control the government. The government controls the “printing press.” The printing press gives them wealth and power. How can they resist? They sit in their panelled studies… pour a shallow glass of whiskey… open their laptops… and look at their 401(k)s. “Another good month,” they say to themselves. Infinite Cash Stocks are trading at all-time highs. On Friday, the S&P 500 index, compared to sales, hit a new record. And the Tobin’s Q ratio, comparing a stock’s market value to the cost of replacing the asset behind it, has never been higher. This stock market bonanza has helped the elites transfer trillions to themselves ([$30 trillion is our guesstimate]( and we’re sticking with it). They also use this cornucopia of almost infinite cash – fake money from the Federal Reserve – to fund their own grab bag of wishes, fantasies, and claptrap theories. Recommended Link [Cell Phone Owners Beware]( [image]( If you own a cell phone, then mobile service providers hope you never get to see this video that could soon go viral. It was shot in downtown Denver by a multi-millionaire, who exposed sensitive truths about mobile phones and 5G. His experiment could strike a bad chord with mobile phone companies. But you’ve got to see what this man discovered and what it means for phone users in the weeks ahead. [Click here to see this video.]( -- Zombie Companies But why is there so little (almost none at all) dissent from the programs and schemes that are bound to ruin the country? Why are there no wise men? No selfless graybeards? For one thing, in a world of free money, there’s almost no penalty for being a numbskull. And no reward for prudence. You run your business at a loss? No problem. Just borrow whatever you need. Almost one out of four of the companies on the Russell 3000 Index are not making enough money to pay even the interest on their debts. That’s 44% more companies than last year. And last year, these zombies owed about $1 trillion. Now, it’s almost $2 trillion. When wobbly companies borrow, they call the loans “junk bonds.” Typically, investors demand a premium for lending to these companies, for the obvious reason – it’s likely that the loans will never be repaid. And when investors are feeling particularly fearful – say, during a financial crisis, like we saw in 2008 – the yield on these junk bonds goes up. In 2008, for example, investors demanded a real yield (over inflation) of 20%. [Featured: Shameful! See What Biden and the Democrats Just Did To YOUR Money]( Can’t Lose But guess what? Last week, the Bank of America’s index of junk bond yields fell below 4% – which puts it below the level of consumer price inflation. So now, the riskiest companies – those voted least likely to succeed – are able to borrow money at a profit! Wall Street gamblers have never had it better. At today’s federal funds rate… and today’s consumer price inflation… …the carry cost for the big speculators is hugely negative. In other words, if they just took money directly from the Federal Reserve… paid the 0.25% interest (the Fed’s current key lending rate)… and gave back the money a year later… they’d make 4.75%! Recommended Link [Millionaire’s Big Prediction From Living Room Couch]( [image]( Teeka Tiwari – America’s No. 1 Investor – just made an outrageous prediction. Recorded live from his living room couch… He blasts Congress, reveals nasty truths about America… And reveals one technology set to radically change our nation. Already, 400,000+ viewers have checked it out. WARNING: This video may make you furious. [Watch His Urgent Video Now]( -- Spreading Rot But the rot spreads out… like gangrene. The universities all benefited from the feds’ student loan program. (Not to mention all the federal grants and giveaways to professors willing to debase themselves by studying “‘diversity.”) And even the Pentagon has taken advantage of the public in the [Bubble Epoch](. The military budget was $300 billion in 1989 – when America’s last serious enemy, the Soviet Union, gave up. At the time, former U.S. Secretaries of Defense estimated that the budget could be cut in half with no loss of national security. Instead, the budget doubled! Whole new industries – with their own lobbyists – are eager to climb on board this bus. Move over lobbyists for Goldman Sachs and Raytheon. Make room for the Green Lobby… funded by… you guessed it… funny money. [NFTs]( [cryptos]( [meme stocks]( [billionaire space cadets]( whee! There’s no penalty for self-indulgence… and no reward for hard work, self-discipline, and careful planning. [Featured: Have a Visa or Mastercard? Get Ready To Shred Them!]( Big Hurrah This is not supposed to happen. Cooler heads are meant to prevail. Old-timers are supposed to say: “This just isn’t right; it makes no sense. You folks over the Fed have gotta unwind this madness.” Call in the old grumps… the wet blankets… the spoil sports! But wait… The old-timers are corruptible, too. They have their stock portfolios. They have their contracts, their tenured professorships, their cryptos… and their reputations, too. They were silent when Fed chief Alan Greenspan gave them his famous “[Greenspan Put]( in the late 1980s. They said nothing when dot-coms went to the moon… or when houses became speculative investments. And they cheered when another Fed chief, Ben Bernanke, bailed out Wall Street in 2008… and gave another big hurrah when the Jerome Powell Fed stepped up the bailouts in 2020. And the stimmy checks? Well… if they help keep the peace… why not? Recommended Link [Get ready America – Is Financial Lockdown Coming?]( [image]( 4 billionaires’ offer critical insight on what inflation means for you and your money. Get ready for a Financial Lockdown says former Goldman banker… [Click here to prepare yourself.]( -- No Objection And now, watching their accounts rise and preparing for retirement, they raise no objection… neither to the fake money… nor to the $3 trillion deficits… nor to any of the daffy policies that will surely end in tears. But the trouble with trouble, as they say, is that it starts out as fun. The elite graybeards [forgot the lessons of the past]( and enjoyed more than 30 years of dabbling, dibbling, and doodling at the public’s expense. And now, the party is wrapping up. And the graybeards have nothing more to say. Regards, [signature] Bill --------------------------------------------------------------- Like what you’re reading? Send your thoughts to [feedback@rogueeconomics.com](mailto:feedback@rogueeconomics.com?subject=The trouble with trouble). --------------------------------------------------------------- FEATURED READS [Joe Biden’s Capital Gains Tax Proposals Could Hurt America’s Small Businesses]( Joe Biden has proposed to increase the taxes on capital gains – which is intended to target big companies and the rich. If this goes into effect, small businesses could take the brunt rather than the wealthy… [How Investors Can Profit From 21st Century Psychedelic Therapies]( medicine is taking center stage in American finance. But you don’t have to go for a trip in order to reap the rewards… MAILBAG Inflation and [climate change]( are on dear readers’ minds again… Inflation has been around since I was a tot. I am 78 years old. When given the choice of cereal and boxes, a herd of elephants goes for the boxes. Make of that what you will! And the cereal boxes have gotten smaller, too. – Don H. It helps me to also remember Al Gore’s Inconvenient Truth movie and what a completely bogus, non-scientific hogwash movie that it is!!! Please wake up, count your toes, eyes, and teeth (yes, you’re still omnivores!!), and KNOW that grandma and grandpa’s common sense and loving devotions are completely worthy and good! – Paul A. I don’t know how much climate change is the result of man’s actions. I do know that carbon pollution does hurt people’s health and that it’s not nice to pollute other people’s environments. If the climate change scare cleans up my air, I’m all for it. – Jon J. Meanwhile, another shares their personal [inflation]( experiences… I am a long-time fan of your daily musings and just wanted to add that inflation is alive and well Downunder, here in New Zealand as well… As an International Freight Forwarder, I am also struggling with near hyper-inflation, port congestion, and having our shipping line contracts null and voided, as per the fine print! Just one of many examples I would like to share is that we have had a long-term contract with a major shipping line for 40 slots per month of FCL (full Container Load) on the Trans-Tasman service between New Zealand and Australia. Not only have these rates per container gone up 500% in just the first seven months of this year, but the shipping line has reduced our space from 40 slots to 20… and now, just 10! Other shipping lines are all full, too, making our business very difficult indeed. I think the problems we share are now global, with no end in sight. Keep up the excellent work! – Vince H. Are climate change and finance intertwined, as some dear readers believe? Or is it all “claptrap,” as Bill says? Write us at [feedback@rogueeconomics.com](mailto:feedback@rogueeconomics.com?subject=The trouble with trouble). IN CASE YOU MISSED IT… [Biden, Dems to end cash?]( In March 2020, Casey Research analyst Nick Giambruno uncovered a sinister scheme by Nancy Pelosi and her government colleagues to take the cash out of your wallet… And replace it with a digital currency. According to their research, one of Biden’s top priorities could forever change our financial system, and completely alter the way we spend, borrow, save, and invest. Millions of Americans will be completely blindsided by the events to come… But [this short presentation]( will show you exactly what’s coming… what Pelosi’s plans mean for your cash… and how you can prepare. If you have money in any kind of U.S. bank account… business contract… or even cash under your mattress… You’ll want to take a look at Nick’s briefing as soon as possible. [Click here now to see what you need to know.]( [image]( --------------------------------------------------------------- Get Instant Access Click to read these free reports and automatically sign up for daily research. [image]( [An Insider’s Guide to Making a Fortune from Small Tech Stocks]( [image]( [The Trader’s Guide to Technical Analysis]( [image]( [The Ultimate Guide to Taking Back Your Privacy]( [Rogue Economincs]( Rogue Economics 55 NE 5th Avenue, Delray Beach, FL 33483 [www.rogueeconomics.com]( [Share]( [FACEBOOK]( [Tweet]( [TWITTER]( To ensure our emails continue reaching your inbox, please [add our email address]( to your address book. This editorial email containing advertisements was sent to {EMAIL} because you subscribed to this service. To stop receiving these emails, click [here](. Rogue Economics welcomes your feedback and questions. But please note: The law prohibits us from giving personalized advice. 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